Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Enterprises Characteristics and Lean Outcome: An Empirical Evidence from Vietnam Manufacturing Enterprises

Enterprises Characteristics and Lean Outcome: An Empirical Evidence from Vietnam Manufacturing... Lean Manufacturing is a popular method to achieve the improvement on productivity, quality, cost, and delivery for organizations. This approach focuses on the systematics to eliminate wastes and non-value added activities from the production. This study mentions the successes and challenges of Vietnam manufacturing enterprises for adapting and transformation for Lean Manufacturing approaching. The aim of this study is to analyze the charac- teristics of Vietnam enterprises that influencing Lean outcome and present critical factors for overcoming obsta- cles to successful Lean implementation in Vietnam local enterprises. This paper uses case-based research to col- lect data through multiple cases that applied Lean to drive the findings. A combination of comprehensive litera- ture review and interview key persons at case study was employed in this study. This study also highlights the strong potential of Lean implementation initiatives in affecting organizational performance improvements. Key words: Lean manufacturing, Challenge features, Success factors, Vietnam Manufacturing enterprises INTRODUCTION In Vietnam, Lean was introduced after the 1990s as a new Globalization and emerging technologies are having enor- approach for organizations in productivity improvement, mous impacts on the manufacturing industrial around the cost reduction, and quality assurance. Several Vietnamese world. To effectively compete in the global market, every enterprises have applied Lean tools and techniques and organizations should focus on improving the effectiveness achieved highly encouraging results. However, Lean in Vi- of internal operational functions with a effectively pro- etnam is still a new concept for most organizations. As duction and operation management [1]. Lean manufac- mentioned above, the ratio of successful enterprises in Vi- st turing will be the standard manufacturing model in 21 etnam is not high, just less than one percent [7]. These century [2]. The term “Lean Manufacturing” had intro- results make Lean implementation a complex and central duced by Womack and Jones (1990) when published the process. Therefore, the critical success factors (CSFs) in book named “The machine that changed the world” is one the implementation of Lean must be identified. Through of the improvement initiatives focuses on continous im- the case study, this research aims to present the factors provement through waste elimination [3]. The main that are perceived as critical for the successful application strength of Lean is its capability to reduce manufacturing of Lean based on analyzing the enterprise characteristics cost through elimination all types of wastes. It shall guide affecting Lean implementation outcomes Thus, the ques- a company to become a world-class organization [4]. This tions research of this paper are: approach in eliminating wastes has made a substantial im- RQ1. How Lean practices affecting enterprise’s perfor- pact on manufacturing companies resulting in higher per- mance in a developing country such as Vietnam? formance enhancements and significant improvement in RQ2. What are the characteristics of Vietnamese enter- delivery, quality, flexibility and manufacturing cost [5]. As prises that challenging Lean outcome? RQ3. What are the a result, many companies have saved millions of dollars in critical factors ensuring Lean success for Vietnamese en- reducing cost via wastes elimination (such as over-pro- terprises? duction, defect, over-processing, wait, inventory…). Oth- ers companies around the world also succeeded in Lean implementation [6]. © 2022 Author(s). This is an open access article licensed under the Creative Commons BY 4.0 (https://creativecommons.org/licenses/by/4.0/ D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 99 LITERATURE REVIEW deployment as part of their capability-building. Sustaining Lean manufacturing such a long-term management philosophy presents the Lean manufacturing (LM) is an integrated set of principles, challenge for the enterprises embarking on a Lean journey practices, tools and techniques designed to address the [15]. To develop an effective and sustainable Lean trans- root causes of operational underperformance. It is a sys- formation change, enterprises need to address each of tematic approach to eliminate the sources of loss from en- the following elements, at all levels of the organization: tire value streams in order to close the gap between ac- strategy & alignment, leadership, behaviors & engage- tual performance and the requirements of customers and ment, process management and technology, tools & tech- shareholders. Therefore, the objective of Lean is to opti- niques [16]. Lean requires simultaneously the integration mize cost, quality and delivery, while improving safety. of three elements: operating system, management infra- Accordingly, Lean tries to eliminate three key types of structure and mindsets and behaviors [13]. losses in operation: wastes, variability and inflexibility [8]. Lean as a secret weapon is responsible for wastes elimi- Success factors for successful Lean implementation nation and quality improvement, hence cost reduction Success factors (SFs) are the limited number of factors in within organizations [3]. According to Detty and Yingling which satisfactory results will ensure successful competi- (2000), Lean is a comprehensive philosophy for structur- tive performance for individuals, departments or organi- ing, operating, controlling, managing and continuously zations. SFs are those areas where “things must go right” improving industrial production systems [9]. The goal of for the business to flourish and attain the manager’s goals Lean is the reduction of wastes in human effort, inven- [17]. SFs are very important in ensuring the successful im- tory, time to market and manufacturing space, in order to plementation of Lean and to avoid failure risks such as become highly responsive to customer demand while pro- generation of losses to an organization’s cost, time and ducing world-class quality products in the most efficient employee’s efforts [18]. The SFs approach has been and economical manner. There are seven types of wastes widely adopted and used in different research fields to de- in Lean systems: transportation, inventory, motion, de- termine key factors which are essential to the success of lays, overproduction, over-processing, and defects [1]. any program or technique. For example, Achanga et al Shah and Ward (2003) indicated that Lean is a multi-di- (2006) classified four SFs of Lean in SMEs, namely leader- mensional approach that encompasses a wide variety of ship and management, skills and expertise, finance, and a management practices, including Just-In-Time, Jidoka, culture of continuous improvement [1]. Standardized work, Kaizen, team work, cellular manufac- Although, many enterprises have implemented Lean tools turing and supplier management [10]. LM is also a broad and techniques, most of them are faced with challenges. collection of principles and practices that can improve These challenges could be avoided and overcome by iden- corporate performance [11]. According to Creese (2000) tifying the SFs of Lean tools. In other words, there are indicated that the Lean is a manufacturing philosophy that many SFs if identified and well understood that will sup- shortens lead time and reduce costs via eliminating port the overcoming of these obstacles and difficulties wastes (MUDA) yet improves quality, employee skills and [19]. Therefore, studying and understanding the SFs of job satisfaction [12]. Lean implementation is very essential. There are many pa- Lean is not a project, but Lean is an approach for continu- pers published regarding the SFs of Lean and productivity ous improvement to achieve the perfection through the improvement initiatives. Table 1 presents factors as indi- elimination of all sources of loss [13]. Taken to its fullest cated by different authors in previous researches. extent, Lean is as much about operational excellence as a There have been disagreements among the reviewed ar- strategy approach. In this context, Lean should be viewed ticles. Some factors were mentioned in most of the re- more as a business philosophy than a merely set of tools search (e.g.: top management commitment, culture or techniques just to improve operations. For that, along- change, training, communication…) while others were side manufacturing, all other subsystems need to change found in only one or two of the researches. This gap could if an organization wants to convert into a Lean, learning be attributed, in the researcher’s opinion, to the sparse enterprise, reaping its full benefits. The right combination theoretical background that underpins the interpretation for it consists of a long-term philosophy, processes and of how and why these factors guarantee successful imple- people with a culture all about competitive excellence. It mentation of the Lean approach, since they were identi- is important to introduce an alignment in the ways the fied through a revision of the experience of some enter- members of an organization think and behave [14]. prises that have successfully implemented the Lean ap- Although Lean does yield immediate results, the full ben- proach. Therefore, the necessity of developing a specific efits come only when it becomes the basis for a process of study to understand how and why these critical factors continuous improvement able to keep the results over guarantee successful Lean approach implementation. time. Such a view implicates a mental shift away from the short-term focus to a long-term perspective. Enterprises need to institutionalize Lean practices and their policies 100 Management Systems in Production Engineering 2022, Volume 30, Issue 2 Table 1 the intent of Lean. Instead, it should provide a way to cre- Synthesize critical success factors for Lean implementation ate new work, motivate and develop workers full poten- No Critical success factors References tial, rather than simply destroying jobs in the name of ef- 1 Top management [1, 3, 6, 20, 21, 22, 23, 24, ficiency, in order to create stable and long-term growth; commitment 25, 26, 27, 28, 29] (3) the principles of Lean manufacturing can be applied to 2 Clear goals and objectives [3, 6, 24, 26, 27, 28, 29] every business process; (4) the “continuous improve- 3 Empower decision maker [3, 20, 26, 29] ment” and “respect for people” principles are the key to 4 Financial capability [1, 3, 27] making the Lean management system work [35]. 5 Time allocation [30] 6 Infrastructure [6, 24, 27] Table 2 7 Culture change [13, 26, 27, 29, 30, 31] Most problems frequency for Lean implementation 8 Behavior change [3, 26] # Ten most frequency implementation problems % 9 Effective communication [3, 6, 20, 21, 23, 27, 30] 1 Implementation took long than planned 76 10 Team work ability [3, 23, 29] Maijor unanticipated problems occurred during 74 11 Understand Lean tools [1, 3, 6, 26, 29] implementation 12 Continuous improvement [3, 6, 20] Co-ordination of implementation activities was 66 13 Problem solving capability [3, 26] not effective enough 14 Standardization [3, 29, 32] Competing activities and crisies distracted 64 15 Employee involvement [6, 26, 27, 28, 30] attention from implementation 16 Training and education [6, 20, 23, 27, 28, 29] Skills and abilities of implementation team were 63 17 Reward and punishment [3, 20] lacking 18 Set up an evaluation system [3, 6, 30, 33] Training and instructinons to lower level 62 (KPI) employees was not enough 19 Project prioritization [3, 6, 23, 27] Uncontrollable factors in the externala 60 20 Flexible in implementing [26] environment adversely affected implementation 21 Linking Lean to suppliers [3, 27, 32, 24] Leadership and direction provided by 59 22 Linking Lean to customers [6, 20, 27, 32, 33] department managers was not good enough Key implementation tasks and activities were 56 Challenges for Lean implementation not defined in enough detail Information systems used to monitor 56 Case studies of enterprises that have tried to adopt the implementation were not adequate concepts and implement them in their own management Source: The authors conducted from [15, 34]. systems, have proven that the transition process is an ar- duous and time-consuming task and can even be some- Because these points are not widely shared and under- how problematic in some cases. stood among Lean practitioners, it is foreseeable that as- The majority of the researchers acknowledge that the sociates or other key stakeholders, such as suppliers, cus- transformation process to a Lean management system tomers, or investors will experience negative outcomes. across the enterprise requires a lot of effort, participation Emiliani and Stec (2005), refers to a survey made by the of all levels in the organization hierarchy, introduction of Lean Enterprise Institute, in 2004, reporting the “State of new principles not only in the shop-floor level but also in Lean” based on data from 999 participants. According to the enterprise culture and in the organizational structure. it only 4% of participants described their progress as “ad- For these reasons, transition can be a slow, incremental, vanced”, while 46% described their Lean implementation complex and stressful process that might bring along a efforts as “early” [35]. The report identified several “com- great degree of uncertainty as there are no clear guide- mon obstacles” related to their experience in Lean imple- lines for the transition; rather more the process differs mentation efforts – see Figure 1. substantially from case to case [29]. Transforming an or- ganization to a Lean enterprise is a dynamic process and unique to each organization. The implementation of Lean, as any other business pro- cess change management, is believed to have enormous difficulties. For example, the top 10 most frequent imple- mentation problems as the business tried to implement new strategic decisions – see Table 2. Fig. 1 Common obstacles for Lean implementation Furthermore and in general the current level of Source: The authors conducted from [35]. knowledge possessed by the people leading and partici- pating in a Lean transformation is limited, often missing RESEARCH METHODOLOGY the intents and nuances of “real Lean” such as: (1) Lean is Data collection and analysis oriented to be a stakeholder-based system of manage- A qualitative method has been conducted for this research ment and not a management practice that promotes indi- to provide insights and understanding about the problems vidual shareholders benefits in detriment of all other and answer “how” and “why” Lean can successapplied [36]. shareholders; (2) negative cutting, such as layoffs, is not D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 101 The case study method provides the flexibility approach Case studies are include state companies, private compa- during interviews and gathering of in-house documentary nies and FDI companies possessing typical features and evidence. A combination technique for data collection has represent for multiple enterprises in the same sector. been employed in this research. This comprises literature Data collected by three main sources including: (1) Docu- review and interview key persons in Lean implementa- ments, secondary data collected and analyzed via results tion. Information from the personal interviews were con- of the reports about the manufacturing reality, quality ducted through prepared questionnaires. They involved a control, cost improvement and activities related to Lean number of key personnel in the cases that included the implementation of the enterprise. (2) Individual inter- general workforce of the concerned enterprises and in- view. The targeted participants via the semi-structured in- volved in Lean projects [37]. terview Table are the ones who has experience in years As shown in Figure 2, enterprises were contacted by tele- and directly take part in the Lean implementation plan. phone and e-mail. After the initial contacts were made, a The subjects consist of Production Director, Director of review meeting was arranged between the researcher factory, Heads and Deputies of workshops, specialization and the participants. The review meeting enabled the re- devisions of Lean and members of Lean plans of work- searcher to carry-out direct observation of the activities shops. (3) Observing the participation at TMV and Ha Yen within a particular case. The observatory exercise has en- to get notices on site in one process by applying two Lean abled a visual assessment of the general manufacturing projects in each enterprise. issues at stake. In order to evaluate the critical obstacles hampering suc- cessful Lean implementation in Vietnam manufacturing enterprises, and evolving success factors contributing to successful Lean implementation, a detailed interview questionnaire has been designed. The approach has been directed towards justification of Lean implementation for its support to competitive manufacturing in Vietnam in- dustries. The questionnaire technique has been deployed in the present study for seeking information on the issues related to scrutinizing barriers to effective Lean imple- mentation and developing an understanding of success factors and enablers for successful Lean implementation in the Vietnam manufacturing enterprises. The key ques- tions asked in the semi-structured questionnaires were as Fig. 2 Scenario for research methodology follow: Is this enterprise independently managed or it is owner- Results obtained were noted in a specially improvised managed? document known as the observation data collection − What is your definition of Lean manufacturing? sheet. For example, observations were focused on both performance of work force during their daily tasks and the − What has motivated the enterprise to implement Lean time frame to carry out these activities. The observation manufacturing? exercise was conducted for approximately 30 minutes at − Where has Lean been implemented in your organiza- each particular point of observation. Eventually, infor- tion (piecemeal or whole)? mation from the observation data collection sheet was − What were the criteria for choosing that specific area? analyzed and used for the preparation of the interviewing − How many people were involved in the exercise? process. Personal interviews were conducted through − What training if any, did the staff undertake? prepared semi-structured questionnaires. They involved a − What were the difficulties and challenges and how to number of key personnel in the company that included overcome these issues? the general workforce of the enterprises concerned. This The profile of the case study and number of participants selection criterion was used as a means of acquiring infor- as shown in Table 3. mation in a blanket format so as to make the study more Table 3 representative. Case study profile and number of participants Six manufacturing enterprises in Vietnam implementing Case study Lean in their production processes more than 3 years are State-owned sec- chosen to be representatives for case studies, including: Participants FDI sector Private sector tor (1) Toyota Motor Vietnam – TMV, TMV VPIC1 LeGroup Ha Yen Fomeco Disoco (2) Vietnam Precision Industrial No.1 Co., Ltd – VPIC1, Senior 1 1 2 2 1 1 (3) LeGroup Manufacturing and Trading Company – managers LeGroup, Middle 3 4 1 1 2 2 (4) Ha Yen Join-Stock Company – Ha Yen, Managers (5) Pho Yen Mechanical Joint Stock Company – Fomeco, Staff 2 1 3 3 3 3 (6) Diesel Song Cong Limited Company – Disoco. Source: The authors selected number of participant based on re- search of [37]. 102 Management Systems in Production Engineering 2022, Volume 30, Issue 2 RESEARCH RESULTS AND DISCUSSION (1) small business and unplanned habits, (2) limited vision Characteristics of Vietnam enterprises and challenges and short-term thinking, (3) lack of connection, commu- to applying Lean nity, (4) rely on the relationship, (5) does not keep the Six features of manufacturing enterprises in Vietnam af- trust [46]. While, Lean culture focuses on team works, fect the choice of tools, techniques of LEAN, including: (1) sharing information, and continuous thinking innovation Business size, (2) Technology level, (3) Management Ca- [22, 31]. Apparently, cultural characteristics in Vietnam- pacity, (4) Quality of labor, (5) Corporate culture, and (6) ese businesses do not fit the Lean features. Ability of Supply chain Link of the enterprise. Sixthly, Lean applying successfully means that the enter- Firstly, the business size, in 2016 Vietnam has 391,777 prise need to achieve pull system from up-stream to (97.7%) of 401,000 businesses that are small and medium- down-stream. Unfortunately, the supply chain system in sized enterprises – SMEs [38], and in 2020 the number of Vietnam has not created a stable chain from suppliers to SMEs up to 593,629 of 610,637 businesses with 97.2% manufacturers yet, producers need to import goods [39]. Most of them belong to the private sector (account- abroad costly with large quantity, high risk and unstable ing for 591,499 enterprises (96.9%) of the total number of quality. Connection and cooperation among Vietnamese enterprises in 2020 are private, 16,878 enterprises (2.7%) businesses are not really good [47]. Additionally, uncer- are FDI enterprises, and 2260 enterprises (0.4%) are state- tainty in a supplying chain and the lack of linkage among owned business). SEMs is restricted by financial, time, and partners are barriers to perform JIT successfully. human resources and there are less than 10% of SMEs The Vietnam local enterprise’s characteristics effecting enterprises can achieve success when applying Lean for a the choice and applying Lean successfully are summarized year [7]. in this Table 4 below. Secondly, the technology level of Vietnamese enterprises Table 4 recently backward compared to other countries by 10 to Summary of Vietnam manufacturing enterprise’s features 20 years, especially the state enterprises, and SMEs [40]. No Features Description In 2016, more than 52% of Vietnam businesses using fogy 1 Business size − 97.2% of businesses are small and technology when sole 10% of them is applying state-of- medium-sized; the-art technology into the production. Especially, in ac- − Resources of finance, human, cordance with the report of the Vietnam Chamber of machines and equipment are very Commerce and Industry (2019), 60% of Vietnam enter- limited. prises using more than 6-year-old equipment and most of 2 Technology − Backward technology more than 10 them came from China with 26.6%, Japan, EU, and Korea level years compared to the world; (32%) with 18% are imported before 2005 [41]. − 70% of businesses is small and Thirdly, the production management capacity of Vietnam- medium-sized possessing fogy ese enterprises recently has certain limitations [42]. Man- technology; − 18% of equipment are imported agement competency of enterprise managers and leaders from 2005 and before. have not met the requirements in competitive and flexible 3 Management − Low level of management production conditions [38]. Lean implementation is a competency competency leads to inefficient transformational process and needs to support organiza- control ability tional development alongside process improvement. − and change managing. Therefore, given contextual knowledge of the organiza- 4 Labor quality − 24.1% of worker has been trained; tion, to predict which Lean methods are most important − 70% is unskilled workers; in the situation [43]. − Awareness of the role of Lean Fourthly, the value of Vietnam labor productivity has implementation is not heightened. tended to increase at a relatively fast pace over the years. 5 Business culture − Dissociative, uncooperative; However, the manufacturing industry has low labor − Lack of connection and rely in com- productivity. Regarding international comparison, Viet munication; Nam's labor productivity is compared to Northeast Asia − Small business and unplanned work. countries and ASEAN. The results show the Viet Nam's la- 6 Linkage − Unstable supplying chain; of Supplying bor productivity was lowest among the countries, includ- − Low Cooperation ability between chain producers and suppliers. ing Cambodia [49]. According to statistics of the General Statistics Office of Vietnam (GSO) in 2020, only 24.1% of In conclusion, the characteristics of manufacturing enter- worker has been trained and more than 70% of them are prises in Vietnam are different compared to others. unskilled labor [44]. Low quality of human resources leads Therefore, to apply Lean in Vietnamese enterprises, there to a low chance of self-awareness and perception chang- will be a strategy and a specific path to adapt that feature. ing for applying Lean. In the next part, through Lean application outcome in the Fifthly, the corporate culture of Vietnamese enterprises case study, this paper will propose the critical factors that reflexes the culture of Vietnamese [45]. A group of au- ensure to applying Lean with purposes and tools appro- thors Duong Thi Lieu & Nguyen Van Ha (2008) indicated priate for Vietnamese business at this moment. the limitation of Vietnamese culture affecting the devel- opment process and integration of the enterprise, such as D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 103 Lean application in case companies VIPC1, LeGroup, Fomeco are currently on the road of Toyota Motor Vietnam after 20-year business in Vietnam standardize production by applied Standardized work, Job increase the productivity up to 300% from 16,000 cars as instruction, SPC… after several years implemented Kaizen, designed to 44,800 cars in 2015 without massive invest- 5S, VM. Ha Yen and Disoco, although after 4 years imple- ment. Production cost reduced more than 15% in the pe- mented J.I.T and Kanban to set a pull production system, riod 2013-2015 (Example: Production cost of Vios model the production lines are still not achieved any good suc- was reduced from 20,167 USD/car to 17,169 USD/car). On cess. average, number of faults per car decreased from 0.14 Table 4 faults/car in 2011 to 0.07 faults/car in 2015. The out- The summarization of the applying Lean results in cases comes of productivity, quality and cost are always main- Case company  Lean Tool applied tained continuously by TMV when applying Lean until TMV VPIC1 LeGroup HaYen Fomeco Disoco Wastes/Muda √ √ √ √ √ √ now. 5S & Visualize √ √ √ √ √ VPIC1, after 9-year of Lean applying, reduced the Die- Kaizen √ √ √ √ √ √ Standardized work √ √ √ change time more than 60% (Stamping workshop), areas TPM √ VSM √ of factory cut back to 65.7% (Hub workshop), and in- Cell Layout √ creased capacity to 32% (welding workshop), inventory SMED √ √ √ Kanban/Pull √ √ √ reduction to 90% (Welding components warehouse No. One Piece Flow √ Heijunka/Leveling √ 1). In some states, the probability of defective products is Poka-Yoke √ √ √ eliminated up to 96% and that of failure is cut back by 10% SPC √ √ √ √ √ Job instruction √ √ √ √ per year. In 2016, VPIC1 continues to set a goal of produc- JIT √ √ √ tion cost saving more than 5%. Andon √ Lean outcome evaluation LeGroup increases the productivity more than 200%, probability of defective products for 2 production lines oc- Case company TMV VPIC1 LeGroup HaYen Fomeco Disoco Conclusion Successful Successful Successful Unsuccessful Successful Unsuccessful curred frequently have been reduced more than 96% in the 3-year period 2012-2015. Inventory of semi-produced The research results also indicated that the characteristics products decreased 68%, reduce 78% of Leadtime, which of the enterprise has significant effected to the Lean ap- contribute vastly to reduce production cost. LeGroup’ plying’ outcome due to the affection because of the lim- Strategy is to keep investing Technology, human and Lean ited of Lean’s apply from their lack characteristics. That methods to improve production capacity in the factory explains why the foreign enterprises attain more success more than 10% each year. than Vietnam’s. In the case of Fomeco, applying Lean helps to improve the Firstly, size and infrastructure of Vietnamese companies productivity, the revenue of the enterprise increased con- are in poor conditions. According to the statistics of Gen- tinuously with approximately 47% per year, lead time de- eral Statistics Office in 2016, Vietnam has more than 97% creased 32% while investment of infrastructure and la- of businesses is SMEs. Thus, there is the lack of finance bour is insignificant. In 2014, the rate of defective prod- and human resources quality needed to guarantee the ucts of the enterprise compared to FDI is smaller than 10 success of Lean application. Besides, SMEs is not capable ppm (part per million) and errors in all stages producing of negotiating for positive deals to applying Lean. Ha Yen domestic goods is reduced to more than 2%. Additionally, enterprise is the typical one for SMEs whose the resources there is no customers’ complain about the product’s qual- are inadequate for establishing and following the princi- ity, production cost in some lines providing for FDI clients ple systems as well as reward policies long enough. Simi- is reduced more than 30%. Fomeco keeps maintained pro- larly, the state businesses and SMEs in this research are duction control and processes Kaizen to ensure the qual- independent on the systems provided by the suppliers ity and declined defective products rate to 0% in 2018. while responding maximally the customers’s require- Ha Yen and Disoco after applying Lean did not obtain ex- ments. pected outcomes. The results of productivity, quality, Secondly, the technology level of businesses is much more cost, delivery are not gained and maintained above one backward than that of the other countries in the region year. The author summarizes the applying Lean results in [40], that trigger the impossibility of applying the tech- the case studies from the criteria mentioned above. The niques of Lean (Example: SMED), the standard cannot be result of Lean application as shown in Table 4. controlled fully. For example, Disoco enterprise applied The results from six case studies indicated that the suc- SMED into the Motorbike starter parts process but the cessful of Lean application depend on what tools of Lean whole system of drill and lathe machines are operated for were chosen to apply at right time and right situation of more than 30 years, therefore, it is very difficult to con- management. Case of Lean success is TMV showed that duct any Kaizen ideas. Lean tools are applied step by step from easy tools first Thirdly, the management and operation competency of (such as 5S, VM, Kaizen) to more complex tools (such as Vietnam’s companies is still weak, especially SMEs and the Kanban, Heijunka, Pull, Andon, Poka-yoke). Similarly, state ones. Recognition and controlling ability lead to the 104 Management Systems in Production Engineering 2022, Volume 30, Issue 2 commitment is low. The production director of Disoco has Success factors and enablers for successful Lean imple- been always committed to Lean projects in the interview mentation but still missed the meetings and reports. Level of com- Owing to general apathy of Vietnam enterprises towards mitment for joining in the process weakly brings about the affecting manufacturing performance improvement fact that decisions made in the meeting can not be pro- through strategic maintenance initiatives, there has been posed. After 6 months, applying Lean firstly failed. sluggish growth in the Industry and hard to compete ef- Fourthly, the quality of Vietnamese workers is very low fectively in highly dynamic global marketplace. However, with 81% is unskilled labour. Low-quality labour is a rea- Vietnam enterprises have realized and understood the son for low awareness and cognition. Impaired cognition true potential for enhance manufacturing performance, is in charge of inefficient training activities or rewards. and major proactive maintenance initiatives have been Fifthly, Vietnamese citizens tend to personalize, have a adapted in the manufacturing organizations, since 1990s, short-term vision, and lack sharing and teamwork spirit. due to the burgeoning pressure due to multi-national cor- Meanwhile, the Lean culture highly respects the team- porations, rapid product development, increased quality work spirit and sharing information. The cultural differ- consciousness, cost optimizations, waste reductions and ence makes the changing effort to Lean of the enterprise lead time optimization. Lean has not gained wide ac- more difficult. ceptance in Vietnam industry as prime mover for increas- Sixthly, the production network and supply chain system ing competitiveness. Lean is being looked upon as a po- are unstable and uncompleted. The connection and coop- tential profit source, capable of leading the organizations eration between Vietnam businesses are not good. Each to meet the challenges posed by globalization. enterprise just pay attention to only their benefit but not However, these companies have faced a lot of difficulties to the partners. Instability of the supply chain and the and barriers in effectively adapting to aggressive Lean loose relation between partners are the barriers for busi- principles. The systematic identification and recognition nesses applying J.I.T completely. Two unsecured compo- of barriers to effective Lean implementation program can nents “Participant of suppliers” and “Participant of cus- lead to fostering of a favorable environment in the organ- tomers” trigger 5 out 6 businesses taking part in the re- ization and helping the organizations to develop focused search can not using Lean successfully. Only TMV can suc- Lean implementation program for successfully overcom- ceed at the highest level thanks to the support of provid- ing the obstacles for Lean implementation in Vietnam ers and customers systems. manufacturing sector. The present study highlights the In conclusion, the results of case studies of six typical busi- difficulties faced by Vietnam manufacturing organizations nesses shows that the successful of Lean application for in their quest to effectively implement Lean initiatives in enterprises are depended on features of enterprise (Fig. the pursuit of improving organizational efficiency. In this 3). Besides, the level of Lean achievement for each case regard, a detailed survey of the Vietnamese manufactur- company are also depended on which tool of Lean are im- ing enterprises had analyzed for ascertaining the obsta- plemented in suitable period or not. For example, a SMEs cles affecting the success of Lean implementation pro- enterprise is hard to success with some high level of Lean gram. The various obstacles hindering the organization’s tools at the first year such as Kanban, Andon, Pull produc- quest for achieving excellence through Lean initiatives tion… but also some simple single tools and principles as have been classified as organizational, cultural, behav- 5S, VM, Kaizen are more easy to applied and achieved first ioral, misunderstanding, operational, financial, and de- success. The authors propose a suitable model for partmental difficulties or barriers. roadmap of Lean application in section. This research investigation has realized key main factors that are fundamental, hence critical for the implementa- TMV VPIC1 LeGroup Ha Yen Fomeco Disoco tion of Lean manufacturing within Vietnamese manufac- Experience of LEAN application 20 years 9 years 8 years 4 years 8 years 6 years turing enterprises. They include: (up to 2018) (1) Top management commitment. LEAN tools applied Apply step by step. Implemented Implemented Implemented Focus on Only implemented . Step 1: Kaizen, Kaizen, Muda for Kaizen, Muda for Kanban and Pull implemented 5S, 5S and Kanban Muda, VM first 2 years. first 2 years. system at first. Kaizen (4 years) (2) Cultural transformation. . Step 2: SW Implemented SW Implemented SW Did not implement . Step 3: SMED, after 2 years after 3 years 5S, SW (3) Training and consulting. One piece flow, Leveling (4) Evaluation system (KPIs). . Step 4: Kanban, Cell, Takt time Of these identified factors, it has been hypothesized that Re s ult of applie d Successful Successful Successful Unsuccessful Successful Unsuccessful top management commitment are the most critical ones Level of production achieved in determining the success of a Lean project. Strong lead- Slim production Smooth production ership ethos and committed management support is the Standardize production comer-stone to the success of implementing any idea Stabilize production within an organization. These factors have been discussed Note: Level of LEAN Achieved Fig. 3 Lean application results within case companies in detail in the following sections. D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 105 Top management commitment foster successful Lean implementation program in the or- The successful implementation of Lean requires top man- ganization while avoiding the misconceptions about agement support, commitment and involvement. Top myths regarding Lean in the organization. Moreover, management needs to have a strong commitment to the many other strategic initiatives can also be successfully Lean implementation program and should go all-out for deployed in the organizations for motivating and aligning evolving mechanisms for multi-level communication to all the employees to the organizational goals and objectives employees explaining the importance and benefits of the of growth and sustainable development for meeting the whole program, and whole heartedly propagating the global corporate challenges. Lean benefits to the organization, employees by linking High-performing companies are those with a culture of Lean to the overall organizational strategy and objectives. sustainable and proactive improvement. Manufacturing, The first course of action is to establish a strategic direc- almost more than any other sector, is a global industry. tion for Lean. This can be achieved by evolving appropri- The study further confers that the ability to operate in di- ate Lean policy and master-plan towards Lean implemen- verse environments is a pre-requisite for managers. The tation in the organization. This must be followed by evolv- investigation has clearly indicated that it is highly desira- ing structured Lean secretariat in line with organization’s ble to have some degree of communication skills, long- policies involving employees from various organization term focus and strategic team while intending to imple- functions and hierarchical levels. The management contri- ment any new initiative. butions towards successful Lean implementations can in- clude revising business plans to include Lean goals, affect- Training and consulting ing appropriate cultural transformations in organizational The success of the organization in fully realizing the bene- culture, building strong success stories for promoting mo- fits through effective implementation of traditional and tivation for Lean implementations, communicating the proactive maintenance initiatives including Lean is criti- Lean goals to the entire organization, providing adequate cally dependent upon the competencies of the employees financial resources for affecting business improvements, towards the job. Therefore, an adequate training and con- promoting cross-functional working in the organization, sulting (if needed) for employees at all levels should be providing training and skill enhancements for production treated as key strategic initiative for successful Lean im- and maintenance workers, evolving reward and incentive plementation. The employees must be provided with not mechanisms for promoting proactive maintenance, sup- only technical job relates skills and competencies, but also porting changes and improvements in the workplace, re- need to be well equipped with quality improvement and moving barriers related to middle level management and behavioral training for changing the mind set of employ- enhancing inter-department synergy in the organization. ees from “I operate, you inspect, you maintain” to “I pro- duce, I inspect, I maintain”. The training objectives must Cultural transformation include the systematic development of the knowledge, The biggest challenge before the organization is to be able skill and attitude required by an individual to adequately to make radical transformation in the organization’s cul- perform a given job. The top management responsibility ture for ensuring overall employee participation towards in this regard becomes identification of training needs, the maintenance and manufacturing performance im- setting training targets, training plan, preparation of train- provement through Lean initiatives. For long, Vietnam or- ing calendar, designing of training programs and material, ganizations have been strongly resisting any changes at execution of training and evaluation of training effective- the workplace. Thus, focused and concerted efforts have ness. The top management must endeavor to train and to be made by the top management to bring about moti- develop the employee competencies by updating their vating organization culture by creating awareness to the skill, knowledge and attitude to enable higher productiv- employees about the true potential of Lean and by com- ity and achieve highest standards of quality, to eliminate municating to the employees about the contributions of product defect, equipment failure (breakdowns) and acci- Lean towards the employees in particular. In this regard, dents, to develop multi skilled work force, and to create a organizations should go in for “union buy-in”, since by sense of pride and belonging among all employees. The roping in employee’s union representatives in the Lean results of an effective education and training program will implementation planning and execution, many of the em- include improvement in employee competencies, reduc- ployee behavioral barriers and obstacles to Lean imple- tion in absenteeism, idle hours, wastage/scrap and break- mentation can be appropriately addressed. The unions downs, zero accidents, and increase in number of multi- can directly be convinced that the affected employees will skilled workmen and number of Kaizen. be helped by developing additional skills that make them more valuable to the organization and Lean can effec- Evaluation system (KPI) tively be used to create a more multi-skilled workplace, The reliability of success factors and enablers in achieving which usually improves employee job security. This prac- success through strategic Lean implementation programs tice can effectively help the top management to can be evaluated by deploying Key Performance Indices (KPI) for assessing the manufacturing performance. KPI’s 106 Management Systems in Production Engineering 2022, Volume 30, Issue 2 are widely used within industry to measure specific pa- The difficulties faced by the organizations have been cat- rameters across all the classes of metrics. The strategic egorized into organizational, cultural, behavioral, opera- KPI’s should be adopted and appropriately deployed for tional, financial, and departmental obstacles. The issues assessing the success of Lean implementation programs. related to various obstacles have been critically analyzed KPI’s are necessary to establish objectives, measure per- to evolve strategic enablers and success factors for suc- formance and reinforce positive behaviors. The compari- cessful Lean implementation program for Vietnam enter- son of the current maintenance performance level must prises. Nevertheless, it has also been revealed by the be made against future maintenance performance level study that successful implementation of strategic Lean in- to evaluating the strategic impact of Lean implementation itiatives can be realistically achieved in companies by program. The results of the Lean program should be real- bringing out successful cultural transformations and en- istically explored and shared with the employees so as to suring the whole hearted commitments by the top man- improve the employee satisfaction, motivation, and en- agement. In order to ensure the successful implementa- suring enhanced employee participation and organiza- tion of Lean initiatives and practices in the challenging of tional contributions in the future too. Vietnam manufacturing environments, the organizations Finally the concerted efforts should be made for affecting must be willing to foster an environment that is willing to manufacturing system performance improvements support change in the workplace, and create support for through emphasizing upon maintenance prevention initi- Lean concepts. The top management’s contributions for atives and enhancing focused production system im- successful Lean implementation have been found to be provements by fostering competencies related to produc- highly critical and successful managers must know how to tion facilities by deploying feedback from customer and use Lean initiatives in the different situations to develop various departments, focusing upon learning from exist- employee involvement in every step of the manufacturing ing equipment to new systems, incorporating design re- process and facilities maintenance to optimize production lated improvements, improving safety at workplace, im- flow, increase product quality, and reduce operating costs proving workplace organization through focused 5S initia- and lead time. Moreover, it can be concluded from the re- tives, and integrating Lean with other performance im- search that the successful organizations need to strategi- provement initiatives. cally integrate proactive maintenance initiatives into their manufacturing strategies and successfully boost organiza- CONSLUSION tion’s productivity, improve maintenance performance, Currently, more than 97.2 percent of companies in Vi- reduce costs, improve plant profitability, minimize unnec- etnam are Small and Medium scale Enterprise (SMEs). In essary downtime, ensure better utilization of resources, the context of international economic integration and in- thereby enhancing the competitiveness of the organiza- dustry 4.0, the participation of Vietnam more and more tion. into the international trade agreements will create both Finally, it should be pointed out that a further limitation business opportunities and challenges for enterprises. to this study through case study. Six case companies are There is an only way for Vietnamese SMEs to ensure the not very willing to provide useful information and data. advantage competition is build a smart production system Future research should lead to a wider spectrum of com- step by step and based on the philosophy of continuous panies in order to derive a more concrete multi-variant improvement. In order to enhancement the competitive- analysis on the relations between the variables of Lean ness capability of these enterprises in the viewpoint of implementation. Lean production, some encourage policies for Lean appli- cation through improve technology, management capa- REFERENCES [1] P. Achanga, E. Shehab, R. Roy, G. Nelder. "Critical success bility. Thus, to achieve the high level of the combination factors for lean implementation within SMEs". Journal of between Lean production and industry 4.0, some issues Manufacturing Technology Management, vol. 17, pp. 460- need to be considered as below: 471, 2006. − Develop a suitable policy for SMEs, supporting indus- [2] J.W. Rinehart, C.V. Huxley, D. Robertson. Lean production trials to improve human resource and enhance the and its discontents. Cornell University Press, 1997. management level. [3] J. Womack, D. Jones, D. Roos. Machine that changed the − Develop a national training program to update world. Simon and Schuster, 1990. knowledge of Lean production and information tech- [4] T. Papadopoulou, M. Özbayrak. "Leanness: experiences from the journey to date". Journal of Manufacturing Tech- nology for SMEs in parallel. nology Management, vol. 16, pp. 784-807, 2005. This paper has described the realization of challenge fea- [5] R.R. Fullerton, C.S. McWatters. "The production perfor- tures and success factors for Vietnamese manufacturing mance benefits from JIT implementation". Journal of Op- enterprises to implement Lean. The identified have pro- erations Management, vol. 19, pp. 81-96, 2001. vided a useful insight for the enhancement of critical de- [6] R.B. Coronado, J. Antony. "Critical success factors for the cision-making process, needed for the delivery of corpo- successful implementation of six sigma projects in organi- rate strategic ambitions towards the implementation of sations". The TQM magazine, vol. 14, pp. 92-99, 2002. Lean manufacturing. D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 107 [7] N.D. Minh, N.D. Toan, N.T.L. Chi, T.T. Hoan. "Lean Manage- [28] O. Alaskari, M. Ahmad, N. Dhafr, R. Pinedo-Cuenca. "Criti- ment Application in Vietnam SMEs”. Journal of Science-Vi- cal successful factors (CSFs) for successful implementation etnam National University, vol. 1, pp. 63-71, 2014. of lean tools and ERP systems”. Int. J. Lean Enterprise Re- [8] N.Đ. Minh, N.D. Nguyên, L.A. Tuấn. "Framework of Critical search. vol. 1, pp. 183-199, 2013. Success Factors for Lean Implementation in Vietnam Man- [29] T.W. Leong, P.L. The. "Critical success factors of Six Sigma ufacturing Enterprises". VNU Journal of Science: Econom- in original equipment manufacturer company in Malay- ics and Business, vol. 5, pp. 33-41. 2015 sia”. International Journal of Synergy and Research, vol. 1, [9] R.B. Detty, J.C. Yingling. "Quantifying benefits of conver- pp. 7-21, 2012. sion to lean manufacturing with discrete event simulation: [30] O. Bakås, T. Govaert, H. Van Landeghem. "Challenges and a case study”. International Journal of Production Re- success factors for implementation of lean manufacturing search, vol. 38, pp. 429-445, 2000. in European SMES”. International conference on the mod- [10] R. Shah, P.T. Ward. "Lean manufacturing: context, practice ern information technology in the innovation processes of bundles, and performance”. Journal of operations man- the industrial enterprise (MITIP 2011), 2011. agement, vol. 21, pp. 129-149, 2003. [31] J. Womack, D. Jones. Lean Thinking, revised ed. Free Press, [11] C.R. Cook, J.C. Graser. "Military Airframe Acquisition Costs. New York, 2003. The Effects of Lean Manufacturing”. Rand Corp Santa [32] A. Sabry. "Factors critical to the success of Six-Sigma qual- Monica CA, 2001. ity program and their influence on performance indicators [12] R.C. Creese. "Cost management in lean manufacturing en- in some of Lebanese hospitals”. Arab Economic and Busi- terprises”. AACE International Transactions, p. C5A, 2000. ness Journal, vol. 9, pp. 93-114, 2014. [13] J. Drew, B. McCallum, S. Roggenhofer. Journey to lean: [33] M.T. Taner. "Critical success factors for six sigma imple- making operational change stick. Springer, 2004. mentation in large-scale Turkish construction companies”. [14] J. Liker. The Toyota way fieldbook. Esensi, 2006. International Review of Management and Marketing, vol. [15] S. Victor. "Critical Factors of Lean Implementation in Man- 3, pp. 212-225, 2013. ufacturing Environment”. Master Thesis, Universidade do [34] L.D. Alexander. "Successfully implementing strategic deci- Porto, 2008. sions”. Long Range Planning, vol. 18, pp. 91-97, 1985. [16] P. Hines, P. Found, G. Griffiths, R. Harrison. Staying Lean: [35] M. Emiliani, D. Stec. "Leaders lost in transformation”. thriving, not just surviving. CRC Press, 2011. Leadership & Organization Development Journal, vol. 26, [17] J.F. Rockart, "Critical success factors". Harvard Business pp. 370-387, 2005. Review, vol. 57, pp. 81-91, 1979. [36] C. Perry. "Processes of a case study methodology for post- [18] R. Hamid. "Factor influencing the success of lean services graduate research in marketing”. European Journal of implementation: conceptual framework”. International Marketing, vol. 32, pp. 785-802, 1998. Conference on Business and Economic Research Proceed- [37] R. Yin. Case study research: Design and methods Thousand ing, 2011, pp. 14-16. Oaks. CA: Sage, 2013. [19] K.M. Skaf. Application of lean techniques for the service in- [38] Đ.T. Hương. "Đào tạo cán bộ quản lý trong doanh nghiệp dustry: A case study. Southern Illinois University at Carbon- nhỏ và vừa: Một số đánh giá đề xuất”. Tạp chí Khoa học dale, 2007. Đại học Quốc gia Hà Nội, Kinh tế và Kinh doanh, vol. 23, pp. [20] N.M. Rose, B.M. Deros, and M. Rahman. "Critical success 31-39, 2016. factors for implementing lean manufacturing in Malaysian [39] Vietnam Ministry of Planning and Investment. Vietnamese automotive industry”. Research Journal of Applied Sci- Enterprises white book. Statistics Publishing, 2020. ences, Engineering and Technology, vol. 8, pp. 1191-1200, [40] T. An. “Công nghệ Việt Nam lạc hậu 2-3 thế hệ với thế giới”. 2014. Internet: www.baodatviet.vn /khoa-hoc/cong-nghe/cong- [21] C.C. Yang, T.M. Yeh, K.J. Yang. "The implementation of nghe-viet-nam-lac-hau-2-3-the-he-voi-the-gioi-3283451/, technical practices and human factors of the toyota pro- Aug. 26, 2015 [Dec. 12, 2020]. duction system in different industries”. Human Factors [41] Vietnam Chamber of Commerce and Industry – VCCI. and Ergonomics in Manufacturing & Service Industries, vol. “Trình độ công nghệ doanh nghiệp Việt lạc hậu, gần 60% 22, pp. 541-555, 2012. vẫn sử dụng giải pháp tuổi đời trên 6 năm”. Internet: rd [22] D. Pascal. Lean Production Simplified – 2 edition. New www.viettimes.vn/. Aug.30, 2018 [Dec. 12, 2020]. York: Productivity Press Inc, 2007. [42] N.D. Hai, B.T. Nga. "Working Capacity of Managers in Small [23] F. Fiona, D. Santiago. "Critical Success Factors for ERP Im- and Medium Enterprises: A Case Study in Bac Ninh Prov- plementation and Upgrade”. Journal of Computer Infor- ince of Vietnam," South Asian Research Journal of Business mation Systems (Special Issue), vol. 46, pp. 99-113, 2006. and Management, vol. 1, pp. 34-40, 2019. [24] I. Alhuraish, C. Robledo, A. Kobi. "Key success factors of [43] A. Pearce, D. Pons. "Implementing lean practices: manag- th implementing lean manufacturing and Six Sigma”. 17 ing the transformation risks”. Journal of industrial engi- Toulon-Verona Conference: Excellence in Services", 2014, neering, vol. 1, pp. 1-19, 2013. pp. 1-15. [44] General Statistics Office of Vietnam. “Thông báo tình hình [25] J.K. Liker. The toyota way: 14 Management Principles from lao động việc làm năm 2020”. Internet: www.gso.gov.vn, the World's Greatest Manufacturer. Mc Graw Hill, 2004. [Dec. 13, 2020]. [26] J. Shook, Lean Transformation Model. Lean Enterprise In- [45] T. Do, M. Quilty, A. Milner, S. Longstaff, Business culture stitute, 2016. issues in Vietnam: Case studies. The Australian National [27] M. Kumar, J. Antony, A. Douglas. "Does size matter for Six University, pp. 1-49, 2007. Sigma implementation? Findings from the survey in UK SMEs”. The TQM Journal, vol. 21, pp. 623-635, 2009. 108 Management Systems in Production Engineering 2022, Volume 30, Issue 2 [46] D.T. Liễu, N. T. V. Hà. "Hội nhập và văn hóa kinh doanh Việt Nam”. Hội thảo Quốc tế Việt Nam học lần thứ 3 do Viện Khoa học xã hội Việt Nam và Đại học Quốc gia Hà Nội, Ha- noi, 2008, pp. 1-12. [47] P.N.M. Linh, N.T.T. Huong. "The Supply Chain and Logistics of Vietnam in the context of international economic inte- gration”. International Business Research, vol. 13, pp. 27- 44, 2020. Dat-Minh Nguyen (Corresponding author) Electric Power University Faculty of Industrial and Energy Management No. 235 Hoang Quoc Viet Street, Bac Tu Liem 10000 Hanoi, Vietnam e-mail: minhndm@epu.edu.vn Trung-Kien Duong Electric Power University Faculty of Industrial and Energy Management No. 235 Hoang Quoc Viet Street, Bac Tu Liem 10000 Hanoi, Vietnam e-mail: kiendt@epu.edu.vn http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Systems in Production Engineering de Gruyter

Enterprises Characteristics and Lean Outcome: An Empirical Evidence from Vietnam Manufacturing Enterprises

Loading next page...
 
/lp/de-gruyter/enterprises-characteristics-and-lean-outcome-an-empirical-evidence-EnepirqAg1

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
de Gruyter
Copyright
© 2022 Dat-Minh Nguyen et al., published by Sciendo
eISSN
2450-5781
DOI
10.2478/mspe-2022-0013
Publisher site
See Article on Publisher Site

Abstract

Lean Manufacturing is a popular method to achieve the improvement on productivity, quality, cost, and delivery for organizations. This approach focuses on the systematics to eliminate wastes and non-value added activities from the production. This study mentions the successes and challenges of Vietnam manufacturing enterprises for adapting and transformation for Lean Manufacturing approaching. The aim of this study is to analyze the charac- teristics of Vietnam enterprises that influencing Lean outcome and present critical factors for overcoming obsta- cles to successful Lean implementation in Vietnam local enterprises. This paper uses case-based research to col- lect data through multiple cases that applied Lean to drive the findings. A combination of comprehensive litera- ture review and interview key persons at case study was employed in this study. This study also highlights the strong potential of Lean implementation initiatives in affecting organizational performance improvements. Key words: Lean manufacturing, Challenge features, Success factors, Vietnam Manufacturing enterprises INTRODUCTION In Vietnam, Lean was introduced after the 1990s as a new Globalization and emerging technologies are having enor- approach for organizations in productivity improvement, mous impacts on the manufacturing industrial around the cost reduction, and quality assurance. Several Vietnamese world. To effectively compete in the global market, every enterprises have applied Lean tools and techniques and organizations should focus on improving the effectiveness achieved highly encouraging results. However, Lean in Vi- of internal operational functions with a effectively pro- etnam is still a new concept for most organizations. As duction and operation management [1]. Lean manufac- mentioned above, the ratio of successful enterprises in Vi- st turing will be the standard manufacturing model in 21 etnam is not high, just less than one percent [7]. These century [2]. The term “Lean Manufacturing” had intro- results make Lean implementation a complex and central duced by Womack and Jones (1990) when published the process. Therefore, the critical success factors (CSFs) in book named “The machine that changed the world” is one the implementation of Lean must be identified. Through of the improvement initiatives focuses on continous im- the case study, this research aims to present the factors provement through waste elimination [3]. The main that are perceived as critical for the successful application strength of Lean is its capability to reduce manufacturing of Lean based on analyzing the enterprise characteristics cost through elimination all types of wastes. It shall guide affecting Lean implementation outcomes Thus, the ques- a company to become a world-class organization [4]. This tions research of this paper are: approach in eliminating wastes has made a substantial im- RQ1. How Lean practices affecting enterprise’s perfor- pact on manufacturing companies resulting in higher per- mance in a developing country such as Vietnam? formance enhancements and significant improvement in RQ2. What are the characteristics of Vietnamese enter- delivery, quality, flexibility and manufacturing cost [5]. As prises that challenging Lean outcome? RQ3. What are the a result, many companies have saved millions of dollars in critical factors ensuring Lean success for Vietnamese en- reducing cost via wastes elimination (such as over-pro- terprises? duction, defect, over-processing, wait, inventory…). Oth- ers companies around the world also succeeded in Lean implementation [6]. © 2022 Author(s). This is an open access article licensed under the Creative Commons BY 4.0 (https://creativecommons.org/licenses/by/4.0/ D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 99 LITERATURE REVIEW deployment as part of their capability-building. Sustaining Lean manufacturing such a long-term management philosophy presents the Lean manufacturing (LM) is an integrated set of principles, challenge for the enterprises embarking on a Lean journey practices, tools and techniques designed to address the [15]. To develop an effective and sustainable Lean trans- root causes of operational underperformance. It is a sys- formation change, enterprises need to address each of tematic approach to eliminate the sources of loss from en- the following elements, at all levels of the organization: tire value streams in order to close the gap between ac- strategy & alignment, leadership, behaviors & engage- tual performance and the requirements of customers and ment, process management and technology, tools & tech- shareholders. Therefore, the objective of Lean is to opti- niques [16]. Lean requires simultaneously the integration mize cost, quality and delivery, while improving safety. of three elements: operating system, management infra- Accordingly, Lean tries to eliminate three key types of structure and mindsets and behaviors [13]. losses in operation: wastes, variability and inflexibility [8]. Lean as a secret weapon is responsible for wastes elimi- Success factors for successful Lean implementation nation and quality improvement, hence cost reduction Success factors (SFs) are the limited number of factors in within organizations [3]. According to Detty and Yingling which satisfactory results will ensure successful competi- (2000), Lean is a comprehensive philosophy for structur- tive performance for individuals, departments or organi- ing, operating, controlling, managing and continuously zations. SFs are those areas where “things must go right” improving industrial production systems [9]. The goal of for the business to flourish and attain the manager’s goals Lean is the reduction of wastes in human effort, inven- [17]. SFs are very important in ensuring the successful im- tory, time to market and manufacturing space, in order to plementation of Lean and to avoid failure risks such as become highly responsive to customer demand while pro- generation of losses to an organization’s cost, time and ducing world-class quality products in the most efficient employee’s efforts [18]. The SFs approach has been and economical manner. There are seven types of wastes widely adopted and used in different research fields to de- in Lean systems: transportation, inventory, motion, de- termine key factors which are essential to the success of lays, overproduction, over-processing, and defects [1]. any program or technique. For example, Achanga et al Shah and Ward (2003) indicated that Lean is a multi-di- (2006) classified four SFs of Lean in SMEs, namely leader- mensional approach that encompasses a wide variety of ship and management, skills and expertise, finance, and a management practices, including Just-In-Time, Jidoka, culture of continuous improvement [1]. Standardized work, Kaizen, team work, cellular manufac- Although, many enterprises have implemented Lean tools turing and supplier management [10]. LM is also a broad and techniques, most of them are faced with challenges. collection of principles and practices that can improve These challenges could be avoided and overcome by iden- corporate performance [11]. According to Creese (2000) tifying the SFs of Lean tools. In other words, there are indicated that the Lean is a manufacturing philosophy that many SFs if identified and well understood that will sup- shortens lead time and reduce costs via eliminating port the overcoming of these obstacles and difficulties wastes (MUDA) yet improves quality, employee skills and [19]. Therefore, studying and understanding the SFs of job satisfaction [12]. Lean implementation is very essential. There are many pa- Lean is not a project, but Lean is an approach for continu- pers published regarding the SFs of Lean and productivity ous improvement to achieve the perfection through the improvement initiatives. Table 1 presents factors as indi- elimination of all sources of loss [13]. Taken to its fullest cated by different authors in previous researches. extent, Lean is as much about operational excellence as a There have been disagreements among the reviewed ar- strategy approach. In this context, Lean should be viewed ticles. Some factors were mentioned in most of the re- more as a business philosophy than a merely set of tools search (e.g.: top management commitment, culture or techniques just to improve operations. For that, along- change, training, communication…) while others were side manufacturing, all other subsystems need to change found in only one or two of the researches. This gap could if an organization wants to convert into a Lean, learning be attributed, in the researcher’s opinion, to the sparse enterprise, reaping its full benefits. The right combination theoretical background that underpins the interpretation for it consists of a long-term philosophy, processes and of how and why these factors guarantee successful imple- people with a culture all about competitive excellence. It mentation of the Lean approach, since they were identi- is important to introduce an alignment in the ways the fied through a revision of the experience of some enter- members of an organization think and behave [14]. prises that have successfully implemented the Lean ap- Although Lean does yield immediate results, the full ben- proach. Therefore, the necessity of developing a specific efits come only when it becomes the basis for a process of study to understand how and why these critical factors continuous improvement able to keep the results over guarantee successful Lean approach implementation. time. Such a view implicates a mental shift away from the short-term focus to a long-term perspective. Enterprises need to institutionalize Lean practices and their policies 100 Management Systems in Production Engineering 2022, Volume 30, Issue 2 Table 1 the intent of Lean. Instead, it should provide a way to cre- Synthesize critical success factors for Lean implementation ate new work, motivate and develop workers full poten- No Critical success factors References tial, rather than simply destroying jobs in the name of ef- 1 Top management [1, 3, 6, 20, 21, 22, 23, 24, ficiency, in order to create stable and long-term growth; commitment 25, 26, 27, 28, 29] (3) the principles of Lean manufacturing can be applied to 2 Clear goals and objectives [3, 6, 24, 26, 27, 28, 29] every business process; (4) the “continuous improve- 3 Empower decision maker [3, 20, 26, 29] ment” and “respect for people” principles are the key to 4 Financial capability [1, 3, 27] making the Lean management system work [35]. 5 Time allocation [30] 6 Infrastructure [6, 24, 27] Table 2 7 Culture change [13, 26, 27, 29, 30, 31] Most problems frequency for Lean implementation 8 Behavior change [3, 26] # Ten most frequency implementation problems % 9 Effective communication [3, 6, 20, 21, 23, 27, 30] 1 Implementation took long than planned 76 10 Team work ability [3, 23, 29] Maijor unanticipated problems occurred during 74 11 Understand Lean tools [1, 3, 6, 26, 29] implementation 12 Continuous improvement [3, 6, 20] Co-ordination of implementation activities was 66 13 Problem solving capability [3, 26] not effective enough 14 Standardization [3, 29, 32] Competing activities and crisies distracted 64 15 Employee involvement [6, 26, 27, 28, 30] attention from implementation 16 Training and education [6, 20, 23, 27, 28, 29] Skills and abilities of implementation team were 63 17 Reward and punishment [3, 20] lacking 18 Set up an evaluation system [3, 6, 30, 33] Training and instructinons to lower level 62 (KPI) employees was not enough 19 Project prioritization [3, 6, 23, 27] Uncontrollable factors in the externala 60 20 Flexible in implementing [26] environment adversely affected implementation 21 Linking Lean to suppliers [3, 27, 32, 24] Leadership and direction provided by 59 22 Linking Lean to customers [6, 20, 27, 32, 33] department managers was not good enough Key implementation tasks and activities were 56 Challenges for Lean implementation not defined in enough detail Information systems used to monitor 56 Case studies of enterprises that have tried to adopt the implementation were not adequate concepts and implement them in their own management Source: The authors conducted from [15, 34]. systems, have proven that the transition process is an ar- duous and time-consuming task and can even be some- Because these points are not widely shared and under- how problematic in some cases. stood among Lean practitioners, it is foreseeable that as- The majority of the researchers acknowledge that the sociates or other key stakeholders, such as suppliers, cus- transformation process to a Lean management system tomers, or investors will experience negative outcomes. across the enterprise requires a lot of effort, participation Emiliani and Stec (2005), refers to a survey made by the of all levels in the organization hierarchy, introduction of Lean Enterprise Institute, in 2004, reporting the “State of new principles not only in the shop-floor level but also in Lean” based on data from 999 participants. According to the enterprise culture and in the organizational structure. it only 4% of participants described their progress as “ad- For these reasons, transition can be a slow, incremental, vanced”, while 46% described their Lean implementation complex and stressful process that might bring along a efforts as “early” [35]. The report identified several “com- great degree of uncertainty as there are no clear guide- mon obstacles” related to their experience in Lean imple- lines for the transition; rather more the process differs mentation efforts – see Figure 1. substantially from case to case [29]. Transforming an or- ganization to a Lean enterprise is a dynamic process and unique to each organization. The implementation of Lean, as any other business pro- cess change management, is believed to have enormous difficulties. For example, the top 10 most frequent imple- mentation problems as the business tried to implement new strategic decisions – see Table 2. Fig. 1 Common obstacles for Lean implementation Furthermore and in general the current level of Source: The authors conducted from [35]. knowledge possessed by the people leading and partici- pating in a Lean transformation is limited, often missing RESEARCH METHODOLOGY the intents and nuances of “real Lean” such as: (1) Lean is Data collection and analysis oriented to be a stakeholder-based system of manage- A qualitative method has been conducted for this research ment and not a management practice that promotes indi- to provide insights and understanding about the problems vidual shareholders benefits in detriment of all other and answer “how” and “why” Lean can successapplied [36]. shareholders; (2) negative cutting, such as layoffs, is not D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 101 The case study method provides the flexibility approach Case studies are include state companies, private compa- during interviews and gathering of in-house documentary nies and FDI companies possessing typical features and evidence. A combination technique for data collection has represent for multiple enterprises in the same sector. been employed in this research. This comprises literature Data collected by three main sources including: (1) Docu- review and interview key persons in Lean implementa- ments, secondary data collected and analyzed via results tion. Information from the personal interviews were con- of the reports about the manufacturing reality, quality ducted through prepared questionnaires. They involved a control, cost improvement and activities related to Lean number of key personnel in the cases that included the implementation of the enterprise. (2) Individual inter- general workforce of the concerned enterprises and in- view. The targeted participants via the semi-structured in- volved in Lean projects [37]. terview Table are the ones who has experience in years As shown in Figure 2, enterprises were contacted by tele- and directly take part in the Lean implementation plan. phone and e-mail. After the initial contacts were made, a The subjects consist of Production Director, Director of review meeting was arranged between the researcher factory, Heads and Deputies of workshops, specialization and the participants. The review meeting enabled the re- devisions of Lean and members of Lean plans of work- searcher to carry-out direct observation of the activities shops. (3) Observing the participation at TMV and Ha Yen within a particular case. The observatory exercise has en- to get notices on site in one process by applying two Lean abled a visual assessment of the general manufacturing projects in each enterprise. issues at stake. In order to evaluate the critical obstacles hampering suc- cessful Lean implementation in Vietnam manufacturing enterprises, and evolving success factors contributing to successful Lean implementation, a detailed interview questionnaire has been designed. The approach has been directed towards justification of Lean implementation for its support to competitive manufacturing in Vietnam in- dustries. The questionnaire technique has been deployed in the present study for seeking information on the issues related to scrutinizing barriers to effective Lean imple- mentation and developing an understanding of success factors and enablers for successful Lean implementation in the Vietnam manufacturing enterprises. The key ques- tions asked in the semi-structured questionnaires were as Fig. 2 Scenario for research methodology follow: Is this enterprise independently managed or it is owner- Results obtained were noted in a specially improvised managed? document known as the observation data collection − What is your definition of Lean manufacturing? sheet. For example, observations were focused on both performance of work force during their daily tasks and the − What has motivated the enterprise to implement Lean time frame to carry out these activities. The observation manufacturing? exercise was conducted for approximately 30 minutes at − Where has Lean been implemented in your organiza- each particular point of observation. Eventually, infor- tion (piecemeal or whole)? mation from the observation data collection sheet was − What were the criteria for choosing that specific area? analyzed and used for the preparation of the interviewing − How many people were involved in the exercise? process. Personal interviews were conducted through − What training if any, did the staff undertake? prepared semi-structured questionnaires. They involved a − What were the difficulties and challenges and how to number of key personnel in the company that included overcome these issues? the general workforce of the enterprises concerned. This The profile of the case study and number of participants selection criterion was used as a means of acquiring infor- as shown in Table 3. mation in a blanket format so as to make the study more Table 3 representative. Case study profile and number of participants Six manufacturing enterprises in Vietnam implementing Case study Lean in their production processes more than 3 years are State-owned sec- chosen to be representatives for case studies, including: Participants FDI sector Private sector tor (1) Toyota Motor Vietnam – TMV, TMV VPIC1 LeGroup Ha Yen Fomeco Disoco (2) Vietnam Precision Industrial No.1 Co., Ltd – VPIC1, Senior 1 1 2 2 1 1 (3) LeGroup Manufacturing and Trading Company – managers LeGroup, Middle 3 4 1 1 2 2 (4) Ha Yen Join-Stock Company – Ha Yen, Managers (5) Pho Yen Mechanical Joint Stock Company – Fomeco, Staff 2 1 3 3 3 3 (6) Diesel Song Cong Limited Company – Disoco. Source: The authors selected number of participant based on re- search of [37]. 102 Management Systems in Production Engineering 2022, Volume 30, Issue 2 RESEARCH RESULTS AND DISCUSSION (1) small business and unplanned habits, (2) limited vision Characteristics of Vietnam enterprises and challenges and short-term thinking, (3) lack of connection, commu- to applying Lean nity, (4) rely on the relationship, (5) does not keep the Six features of manufacturing enterprises in Vietnam af- trust [46]. While, Lean culture focuses on team works, fect the choice of tools, techniques of LEAN, including: (1) sharing information, and continuous thinking innovation Business size, (2) Technology level, (3) Management Ca- [22, 31]. Apparently, cultural characteristics in Vietnam- pacity, (4) Quality of labor, (5) Corporate culture, and (6) ese businesses do not fit the Lean features. Ability of Supply chain Link of the enterprise. Sixthly, Lean applying successfully means that the enter- Firstly, the business size, in 2016 Vietnam has 391,777 prise need to achieve pull system from up-stream to (97.7%) of 401,000 businesses that are small and medium- down-stream. Unfortunately, the supply chain system in sized enterprises – SMEs [38], and in 2020 the number of Vietnam has not created a stable chain from suppliers to SMEs up to 593,629 of 610,637 businesses with 97.2% manufacturers yet, producers need to import goods [39]. Most of them belong to the private sector (account- abroad costly with large quantity, high risk and unstable ing for 591,499 enterprises (96.9%) of the total number of quality. Connection and cooperation among Vietnamese enterprises in 2020 are private, 16,878 enterprises (2.7%) businesses are not really good [47]. Additionally, uncer- are FDI enterprises, and 2260 enterprises (0.4%) are state- tainty in a supplying chain and the lack of linkage among owned business). SEMs is restricted by financial, time, and partners are barriers to perform JIT successfully. human resources and there are less than 10% of SMEs The Vietnam local enterprise’s characteristics effecting enterprises can achieve success when applying Lean for a the choice and applying Lean successfully are summarized year [7]. in this Table 4 below. Secondly, the technology level of Vietnamese enterprises Table 4 recently backward compared to other countries by 10 to Summary of Vietnam manufacturing enterprise’s features 20 years, especially the state enterprises, and SMEs [40]. No Features Description In 2016, more than 52% of Vietnam businesses using fogy 1 Business size − 97.2% of businesses are small and technology when sole 10% of them is applying state-of- medium-sized; the-art technology into the production. Especially, in ac- − Resources of finance, human, cordance with the report of the Vietnam Chamber of machines and equipment are very Commerce and Industry (2019), 60% of Vietnam enter- limited. prises using more than 6-year-old equipment and most of 2 Technology − Backward technology more than 10 them came from China with 26.6%, Japan, EU, and Korea level years compared to the world; (32%) with 18% are imported before 2005 [41]. − 70% of businesses is small and Thirdly, the production management capacity of Vietnam- medium-sized possessing fogy ese enterprises recently has certain limitations [42]. Man- technology; − 18% of equipment are imported agement competency of enterprise managers and leaders from 2005 and before. have not met the requirements in competitive and flexible 3 Management − Low level of management production conditions [38]. Lean implementation is a competency competency leads to inefficient transformational process and needs to support organiza- control ability tional development alongside process improvement. − and change managing. Therefore, given contextual knowledge of the organiza- 4 Labor quality − 24.1% of worker has been trained; tion, to predict which Lean methods are most important − 70% is unskilled workers; in the situation [43]. − Awareness of the role of Lean Fourthly, the value of Vietnam labor productivity has implementation is not heightened. tended to increase at a relatively fast pace over the years. 5 Business culture − Dissociative, uncooperative; However, the manufacturing industry has low labor − Lack of connection and rely in com- productivity. Regarding international comparison, Viet munication; Nam's labor productivity is compared to Northeast Asia − Small business and unplanned work. countries and ASEAN. The results show the Viet Nam's la- 6 Linkage − Unstable supplying chain; of Supplying bor productivity was lowest among the countries, includ- − Low Cooperation ability between chain producers and suppliers. ing Cambodia [49]. According to statistics of the General Statistics Office of Vietnam (GSO) in 2020, only 24.1% of In conclusion, the characteristics of manufacturing enter- worker has been trained and more than 70% of them are prises in Vietnam are different compared to others. unskilled labor [44]. Low quality of human resources leads Therefore, to apply Lean in Vietnamese enterprises, there to a low chance of self-awareness and perception chang- will be a strategy and a specific path to adapt that feature. ing for applying Lean. In the next part, through Lean application outcome in the Fifthly, the corporate culture of Vietnamese enterprises case study, this paper will propose the critical factors that reflexes the culture of Vietnamese [45]. A group of au- ensure to applying Lean with purposes and tools appro- thors Duong Thi Lieu & Nguyen Van Ha (2008) indicated priate for Vietnamese business at this moment. the limitation of Vietnamese culture affecting the devel- opment process and integration of the enterprise, such as D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 103 Lean application in case companies VIPC1, LeGroup, Fomeco are currently on the road of Toyota Motor Vietnam after 20-year business in Vietnam standardize production by applied Standardized work, Job increase the productivity up to 300% from 16,000 cars as instruction, SPC… after several years implemented Kaizen, designed to 44,800 cars in 2015 without massive invest- 5S, VM. Ha Yen and Disoco, although after 4 years imple- ment. Production cost reduced more than 15% in the pe- mented J.I.T and Kanban to set a pull production system, riod 2013-2015 (Example: Production cost of Vios model the production lines are still not achieved any good suc- was reduced from 20,167 USD/car to 17,169 USD/car). On cess. average, number of faults per car decreased from 0.14 Table 4 faults/car in 2011 to 0.07 faults/car in 2015. The out- The summarization of the applying Lean results in cases comes of productivity, quality and cost are always main- Case company  Lean Tool applied tained continuously by TMV when applying Lean until TMV VPIC1 LeGroup HaYen Fomeco Disoco Wastes/Muda √ √ √ √ √ √ now. 5S & Visualize √ √ √ √ √ VPIC1, after 9-year of Lean applying, reduced the Die- Kaizen √ √ √ √ √ √ Standardized work √ √ √ change time more than 60% (Stamping workshop), areas TPM √ VSM √ of factory cut back to 65.7% (Hub workshop), and in- Cell Layout √ creased capacity to 32% (welding workshop), inventory SMED √ √ √ Kanban/Pull √ √ √ reduction to 90% (Welding components warehouse No. One Piece Flow √ Heijunka/Leveling √ 1). In some states, the probability of defective products is Poka-Yoke √ √ √ eliminated up to 96% and that of failure is cut back by 10% SPC √ √ √ √ √ Job instruction √ √ √ √ per year. In 2016, VPIC1 continues to set a goal of produc- JIT √ √ √ tion cost saving more than 5%. Andon √ Lean outcome evaluation LeGroup increases the productivity more than 200%, probability of defective products for 2 production lines oc- Case company TMV VPIC1 LeGroup HaYen Fomeco Disoco Conclusion Successful Successful Successful Unsuccessful Successful Unsuccessful curred frequently have been reduced more than 96% in the 3-year period 2012-2015. Inventory of semi-produced The research results also indicated that the characteristics products decreased 68%, reduce 78% of Leadtime, which of the enterprise has significant effected to the Lean ap- contribute vastly to reduce production cost. LeGroup’ plying’ outcome due to the affection because of the lim- Strategy is to keep investing Technology, human and Lean ited of Lean’s apply from their lack characteristics. That methods to improve production capacity in the factory explains why the foreign enterprises attain more success more than 10% each year. than Vietnam’s. In the case of Fomeco, applying Lean helps to improve the Firstly, size and infrastructure of Vietnamese companies productivity, the revenue of the enterprise increased con- are in poor conditions. According to the statistics of Gen- tinuously with approximately 47% per year, lead time de- eral Statistics Office in 2016, Vietnam has more than 97% creased 32% while investment of infrastructure and la- of businesses is SMEs. Thus, there is the lack of finance bour is insignificant. In 2014, the rate of defective prod- and human resources quality needed to guarantee the ucts of the enterprise compared to FDI is smaller than 10 success of Lean application. Besides, SMEs is not capable ppm (part per million) and errors in all stages producing of negotiating for positive deals to applying Lean. Ha Yen domestic goods is reduced to more than 2%. Additionally, enterprise is the typical one for SMEs whose the resources there is no customers’ complain about the product’s qual- are inadequate for establishing and following the princi- ity, production cost in some lines providing for FDI clients ple systems as well as reward policies long enough. Simi- is reduced more than 30%. Fomeco keeps maintained pro- larly, the state businesses and SMEs in this research are duction control and processes Kaizen to ensure the qual- independent on the systems provided by the suppliers ity and declined defective products rate to 0% in 2018. while responding maximally the customers’s require- Ha Yen and Disoco after applying Lean did not obtain ex- ments. pected outcomes. The results of productivity, quality, Secondly, the technology level of businesses is much more cost, delivery are not gained and maintained above one backward than that of the other countries in the region year. The author summarizes the applying Lean results in [40], that trigger the impossibility of applying the tech- the case studies from the criteria mentioned above. The niques of Lean (Example: SMED), the standard cannot be result of Lean application as shown in Table 4. controlled fully. For example, Disoco enterprise applied The results from six case studies indicated that the suc- SMED into the Motorbike starter parts process but the cessful of Lean application depend on what tools of Lean whole system of drill and lathe machines are operated for were chosen to apply at right time and right situation of more than 30 years, therefore, it is very difficult to con- management. Case of Lean success is TMV showed that duct any Kaizen ideas. Lean tools are applied step by step from easy tools first Thirdly, the management and operation competency of (such as 5S, VM, Kaizen) to more complex tools (such as Vietnam’s companies is still weak, especially SMEs and the Kanban, Heijunka, Pull, Andon, Poka-yoke). Similarly, state ones. Recognition and controlling ability lead to the 104 Management Systems in Production Engineering 2022, Volume 30, Issue 2 commitment is low. The production director of Disoco has Success factors and enablers for successful Lean imple- been always committed to Lean projects in the interview mentation but still missed the meetings and reports. Level of com- Owing to general apathy of Vietnam enterprises towards mitment for joining in the process weakly brings about the affecting manufacturing performance improvement fact that decisions made in the meeting can not be pro- through strategic maintenance initiatives, there has been posed. After 6 months, applying Lean firstly failed. sluggish growth in the Industry and hard to compete ef- Fourthly, the quality of Vietnamese workers is very low fectively in highly dynamic global marketplace. However, with 81% is unskilled labour. Low-quality labour is a rea- Vietnam enterprises have realized and understood the son for low awareness and cognition. Impaired cognition true potential for enhance manufacturing performance, is in charge of inefficient training activities or rewards. and major proactive maintenance initiatives have been Fifthly, Vietnamese citizens tend to personalize, have a adapted in the manufacturing organizations, since 1990s, short-term vision, and lack sharing and teamwork spirit. due to the burgeoning pressure due to multi-national cor- Meanwhile, the Lean culture highly respects the team- porations, rapid product development, increased quality work spirit and sharing information. The cultural differ- consciousness, cost optimizations, waste reductions and ence makes the changing effort to Lean of the enterprise lead time optimization. Lean has not gained wide ac- more difficult. ceptance in Vietnam industry as prime mover for increas- Sixthly, the production network and supply chain system ing competitiveness. Lean is being looked upon as a po- are unstable and uncompleted. The connection and coop- tential profit source, capable of leading the organizations eration between Vietnam businesses are not good. Each to meet the challenges posed by globalization. enterprise just pay attention to only their benefit but not However, these companies have faced a lot of difficulties to the partners. Instability of the supply chain and the and barriers in effectively adapting to aggressive Lean loose relation between partners are the barriers for busi- principles. The systematic identification and recognition nesses applying J.I.T completely. Two unsecured compo- of barriers to effective Lean implementation program can nents “Participant of suppliers” and “Participant of cus- lead to fostering of a favorable environment in the organ- tomers” trigger 5 out 6 businesses taking part in the re- ization and helping the organizations to develop focused search can not using Lean successfully. Only TMV can suc- Lean implementation program for successfully overcom- ceed at the highest level thanks to the support of provid- ing the obstacles for Lean implementation in Vietnam ers and customers systems. manufacturing sector. The present study highlights the In conclusion, the results of case studies of six typical busi- difficulties faced by Vietnam manufacturing organizations nesses shows that the successful of Lean application for in their quest to effectively implement Lean initiatives in enterprises are depended on features of enterprise (Fig. the pursuit of improving organizational efficiency. In this 3). Besides, the level of Lean achievement for each case regard, a detailed survey of the Vietnamese manufactur- company are also depended on which tool of Lean are im- ing enterprises had analyzed for ascertaining the obsta- plemented in suitable period or not. For example, a SMEs cles affecting the success of Lean implementation pro- enterprise is hard to success with some high level of Lean gram. The various obstacles hindering the organization’s tools at the first year such as Kanban, Andon, Pull produc- quest for achieving excellence through Lean initiatives tion… but also some simple single tools and principles as have been classified as organizational, cultural, behav- 5S, VM, Kaizen are more easy to applied and achieved first ioral, misunderstanding, operational, financial, and de- success. The authors propose a suitable model for partmental difficulties or barriers. roadmap of Lean application in section. This research investigation has realized key main factors that are fundamental, hence critical for the implementa- TMV VPIC1 LeGroup Ha Yen Fomeco Disoco tion of Lean manufacturing within Vietnamese manufac- Experience of LEAN application 20 years 9 years 8 years 4 years 8 years 6 years turing enterprises. They include: (up to 2018) (1) Top management commitment. LEAN tools applied Apply step by step. Implemented Implemented Implemented Focus on Only implemented . Step 1: Kaizen, Kaizen, Muda for Kaizen, Muda for Kanban and Pull implemented 5S, 5S and Kanban Muda, VM first 2 years. first 2 years. system at first. Kaizen (4 years) (2) Cultural transformation. . Step 2: SW Implemented SW Implemented SW Did not implement . Step 3: SMED, after 2 years after 3 years 5S, SW (3) Training and consulting. One piece flow, Leveling (4) Evaluation system (KPIs). . Step 4: Kanban, Cell, Takt time Of these identified factors, it has been hypothesized that Re s ult of applie d Successful Successful Successful Unsuccessful Successful Unsuccessful top management commitment are the most critical ones Level of production achieved in determining the success of a Lean project. Strong lead- Slim production Smooth production ership ethos and committed management support is the Standardize production comer-stone to the success of implementing any idea Stabilize production within an organization. These factors have been discussed Note: Level of LEAN Achieved Fig. 3 Lean application results within case companies in detail in the following sections. D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 105 Top management commitment foster successful Lean implementation program in the or- The successful implementation of Lean requires top man- ganization while avoiding the misconceptions about agement support, commitment and involvement. Top myths regarding Lean in the organization. Moreover, management needs to have a strong commitment to the many other strategic initiatives can also be successfully Lean implementation program and should go all-out for deployed in the organizations for motivating and aligning evolving mechanisms for multi-level communication to all the employees to the organizational goals and objectives employees explaining the importance and benefits of the of growth and sustainable development for meeting the whole program, and whole heartedly propagating the global corporate challenges. Lean benefits to the organization, employees by linking High-performing companies are those with a culture of Lean to the overall organizational strategy and objectives. sustainable and proactive improvement. Manufacturing, The first course of action is to establish a strategic direc- almost more than any other sector, is a global industry. tion for Lean. This can be achieved by evolving appropri- The study further confers that the ability to operate in di- ate Lean policy and master-plan towards Lean implemen- verse environments is a pre-requisite for managers. The tation in the organization. This must be followed by evolv- investigation has clearly indicated that it is highly desira- ing structured Lean secretariat in line with organization’s ble to have some degree of communication skills, long- policies involving employees from various organization term focus and strategic team while intending to imple- functions and hierarchical levels. The management contri- ment any new initiative. butions towards successful Lean implementations can in- clude revising business plans to include Lean goals, affect- Training and consulting ing appropriate cultural transformations in organizational The success of the organization in fully realizing the bene- culture, building strong success stories for promoting mo- fits through effective implementation of traditional and tivation for Lean implementations, communicating the proactive maintenance initiatives including Lean is criti- Lean goals to the entire organization, providing adequate cally dependent upon the competencies of the employees financial resources for affecting business improvements, towards the job. Therefore, an adequate training and con- promoting cross-functional working in the organization, sulting (if needed) for employees at all levels should be providing training and skill enhancements for production treated as key strategic initiative for successful Lean im- and maintenance workers, evolving reward and incentive plementation. The employees must be provided with not mechanisms for promoting proactive maintenance, sup- only technical job relates skills and competencies, but also porting changes and improvements in the workplace, re- need to be well equipped with quality improvement and moving barriers related to middle level management and behavioral training for changing the mind set of employ- enhancing inter-department synergy in the organization. ees from “I operate, you inspect, you maintain” to “I pro- duce, I inspect, I maintain”. The training objectives must Cultural transformation include the systematic development of the knowledge, The biggest challenge before the organization is to be able skill and attitude required by an individual to adequately to make radical transformation in the organization’s cul- perform a given job. The top management responsibility ture for ensuring overall employee participation towards in this regard becomes identification of training needs, the maintenance and manufacturing performance im- setting training targets, training plan, preparation of train- provement through Lean initiatives. For long, Vietnam or- ing calendar, designing of training programs and material, ganizations have been strongly resisting any changes at execution of training and evaluation of training effective- the workplace. Thus, focused and concerted efforts have ness. The top management must endeavor to train and to be made by the top management to bring about moti- develop the employee competencies by updating their vating organization culture by creating awareness to the skill, knowledge and attitude to enable higher productiv- employees about the true potential of Lean and by com- ity and achieve highest standards of quality, to eliminate municating to the employees about the contributions of product defect, equipment failure (breakdowns) and acci- Lean towards the employees in particular. In this regard, dents, to develop multi skilled work force, and to create a organizations should go in for “union buy-in”, since by sense of pride and belonging among all employees. The roping in employee’s union representatives in the Lean results of an effective education and training program will implementation planning and execution, many of the em- include improvement in employee competencies, reduc- ployee behavioral barriers and obstacles to Lean imple- tion in absenteeism, idle hours, wastage/scrap and break- mentation can be appropriately addressed. The unions downs, zero accidents, and increase in number of multi- can directly be convinced that the affected employees will skilled workmen and number of Kaizen. be helped by developing additional skills that make them more valuable to the organization and Lean can effec- Evaluation system (KPI) tively be used to create a more multi-skilled workplace, The reliability of success factors and enablers in achieving which usually improves employee job security. This prac- success through strategic Lean implementation programs tice can effectively help the top management to can be evaluated by deploying Key Performance Indices (KPI) for assessing the manufacturing performance. KPI’s 106 Management Systems in Production Engineering 2022, Volume 30, Issue 2 are widely used within industry to measure specific pa- The difficulties faced by the organizations have been cat- rameters across all the classes of metrics. The strategic egorized into organizational, cultural, behavioral, opera- KPI’s should be adopted and appropriately deployed for tional, financial, and departmental obstacles. The issues assessing the success of Lean implementation programs. related to various obstacles have been critically analyzed KPI’s are necessary to establish objectives, measure per- to evolve strategic enablers and success factors for suc- formance and reinforce positive behaviors. The compari- cessful Lean implementation program for Vietnam enter- son of the current maintenance performance level must prises. Nevertheless, it has also been revealed by the be made against future maintenance performance level study that successful implementation of strategic Lean in- to evaluating the strategic impact of Lean implementation itiatives can be realistically achieved in companies by program. The results of the Lean program should be real- bringing out successful cultural transformations and en- istically explored and shared with the employees so as to suring the whole hearted commitments by the top man- improve the employee satisfaction, motivation, and en- agement. In order to ensure the successful implementa- suring enhanced employee participation and organiza- tion of Lean initiatives and practices in the challenging of tional contributions in the future too. Vietnam manufacturing environments, the organizations Finally the concerted efforts should be made for affecting must be willing to foster an environment that is willing to manufacturing system performance improvements support change in the workplace, and create support for through emphasizing upon maintenance prevention initi- Lean concepts. The top management’s contributions for atives and enhancing focused production system im- successful Lean implementation have been found to be provements by fostering competencies related to produc- highly critical and successful managers must know how to tion facilities by deploying feedback from customer and use Lean initiatives in the different situations to develop various departments, focusing upon learning from exist- employee involvement in every step of the manufacturing ing equipment to new systems, incorporating design re- process and facilities maintenance to optimize production lated improvements, improving safety at workplace, im- flow, increase product quality, and reduce operating costs proving workplace organization through focused 5S initia- and lead time. Moreover, it can be concluded from the re- tives, and integrating Lean with other performance im- search that the successful organizations need to strategi- provement initiatives. cally integrate proactive maintenance initiatives into their manufacturing strategies and successfully boost organiza- CONSLUSION tion’s productivity, improve maintenance performance, Currently, more than 97.2 percent of companies in Vi- reduce costs, improve plant profitability, minimize unnec- etnam are Small and Medium scale Enterprise (SMEs). In essary downtime, ensure better utilization of resources, the context of international economic integration and in- thereby enhancing the competitiveness of the organiza- dustry 4.0, the participation of Vietnam more and more tion. into the international trade agreements will create both Finally, it should be pointed out that a further limitation business opportunities and challenges for enterprises. to this study through case study. Six case companies are There is an only way for Vietnamese SMEs to ensure the not very willing to provide useful information and data. advantage competition is build a smart production system Future research should lead to a wider spectrum of com- step by step and based on the philosophy of continuous panies in order to derive a more concrete multi-variant improvement. In order to enhancement the competitive- analysis on the relations between the variables of Lean ness capability of these enterprises in the viewpoint of implementation. Lean production, some encourage policies for Lean appli- cation through improve technology, management capa- REFERENCES [1] P. Achanga, E. Shehab, R. Roy, G. Nelder. "Critical success bility. Thus, to achieve the high level of the combination factors for lean implementation within SMEs". Journal of between Lean production and industry 4.0, some issues Manufacturing Technology Management, vol. 17, pp. 460- need to be considered as below: 471, 2006. − Develop a suitable policy for SMEs, supporting indus- [2] J.W. Rinehart, C.V. Huxley, D. Robertson. Lean production trials to improve human resource and enhance the and its discontents. Cornell University Press, 1997. management level. [3] J. Womack, D. Jones, D. Roos. Machine that changed the − Develop a national training program to update world. Simon and Schuster, 1990. knowledge of Lean production and information tech- [4] T. Papadopoulou, M. Özbayrak. "Leanness: experiences from the journey to date". Journal of Manufacturing Tech- nology for SMEs in parallel. nology Management, vol. 16, pp. 784-807, 2005. This paper has described the realization of challenge fea- [5] R.R. Fullerton, C.S. McWatters. "The production perfor- tures and success factors for Vietnamese manufacturing mance benefits from JIT implementation". Journal of Op- enterprises to implement Lean. The identified have pro- erations Management, vol. 19, pp. 81-96, 2001. vided a useful insight for the enhancement of critical de- [6] R.B. Coronado, J. Antony. "Critical success factors for the cision-making process, needed for the delivery of corpo- successful implementation of six sigma projects in organi- rate strategic ambitions towards the implementation of sations". The TQM magazine, vol. 14, pp. 92-99, 2002. Lean manufacturing. D.-M. NGUYEN, T.-K. DUONG – Enterprises Characteristics and Lean Outcome… 107 [7] N.D. Minh, N.D. Toan, N.T.L. Chi, T.T. Hoan. "Lean Manage- [28] O. Alaskari, M. Ahmad, N. Dhafr, R. Pinedo-Cuenca. "Criti- ment Application in Vietnam SMEs”. Journal of Science-Vi- cal successful factors (CSFs) for successful implementation etnam National University, vol. 1, pp. 63-71, 2014. of lean tools and ERP systems”. Int. J. Lean Enterprise Re- [8] N.Đ. Minh, N.D. Nguyên, L.A. Tuấn. "Framework of Critical search. vol. 1, pp. 183-199, 2013. Success Factors for Lean Implementation in Vietnam Man- [29] T.W. Leong, P.L. The. "Critical success factors of Six Sigma ufacturing Enterprises". VNU Journal of Science: Econom- in original equipment manufacturer company in Malay- ics and Business, vol. 5, pp. 33-41. 2015 sia”. International Journal of Synergy and Research, vol. 1, [9] R.B. Detty, J.C. Yingling. "Quantifying benefits of conver- pp. 7-21, 2012. sion to lean manufacturing with discrete event simulation: [30] O. Bakås, T. Govaert, H. Van Landeghem. "Challenges and a case study”. International Journal of Production Re- success factors for implementation of lean manufacturing search, vol. 38, pp. 429-445, 2000. in European SMES”. International conference on the mod- [10] R. Shah, P.T. Ward. "Lean manufacturing: context, practice ern information technology in the innovation processes of bundles, and performance”. Journal of operations man- the industrial enterprise (MITIP 2011), 2011. agement, vol. 21, pp. 129-149, 2003. [31] J. Womack, D. Jones. Lean Thinking, revised ed. Free Press, [11] C.R. Cook, J.C. Graser. "Military Airframe Acquisition Costs. New York, 2003. The Effects of Lean Manufacturing”. Rand Corp Santa [32] A. Sabry. "Factors critical to the success of Six-Sigma qual- Monica CA, 2001. ity program and their influence on performance indicators [12] R.C. Creese. "Cost management in lean manufacturing en- in some of Lebanese hospitals”. Arab Economic and Busi- terprises”. AACE International Transactions, p. C5A, 2000. ness Journal, vol. 9, pp. 93-114, 2014. [13] J. Drew, B. McCallum, S. Roggenhofer. Journey to lean: [33] M.T. Taner. "Critical success factors for six sigma imple- making operational change stick. Springer, 2004. mentation in large-scale Turkish construction companies”. [14] J. Liker. The Toyota way fieldbook. Esensi, 2006. International Review of Management and Marketing, vol. [15] S. Victor. "Critical Factors of Lean Implementation in Man- 3, pp. 212-225, 2013. ufacturing Environment”. Master Thesis, Universidade do [34] L.D. Alexander. "Successfully implementing strategic deci- Porto, 2008. sions”. Long Range Planning, vol. 18, pp. 91-97, 1985. [16] P. Hines, P. Found, G. Griffiths, R. Harrison. Staying Lean: [35] M. Emiliani, D. Stec. "Leaders lost in transformation”. thriving, not just surviving. CRC Press, 2011. Leadership & Organization Development Journal, vol. 26, [17] J.F. Rockart, "Critical success factors". Harvard Business pp. 370-387, 2005. Review, vol. 57, pp. 81-91, 1979. [36] C. Perry. "Processes of a case study methodology for post- [18] R. Hamid. "Factor influencing the success of lean services graduate research in marketing”. European Journal of implementation: conceptual framework”. International Marketing, vol. 32, pp. 785-802, 1998. Conference on Business and Economic Research Proceed- [37] R. Yin. Case study research: Design and methods Thousand ing, 2011, pp. 14-16. Oaks. CA: Sage, 2013. [19] K.M. Skaf. Application of lean techniques for the service in- [38] Đ.T. Hương. "Đào tạo cán bộ quản lý trong doanh nghiệp dustry: A case study. Southern Illinois University at Carbon- nhỏ và vừa: Một số đánh giá đề xuất”. Tạp chí Khoa học dale, 2007. Đại học Quốc gia Hà Nội, Kinh tế và Kinh doanh, vol. 23, pp. [20] N.M. Rose, B.M. Deros, and M. Rahman. "Critical success 31-39, 2016. factors for implementing lean manufacturing in Malaysian [39] Vietnam Ministry of Planning and Investment. Vietnamese automotive industry”. Research Journal of Applied Sci- Enterprises white book. Statistics Publishing, 2020. ences, Engineering and Technology, vol. 8, pp. 1191-1200, [40] T. An. “Công nghệ Việt Nam lạc hậu 2-3 thế hệ với thế giới”. 2014. Internet: www.baodatviet.vn /khoa-hoc/cong-nghe/cong- [21] C.C. Yang, T.M. Yeh, K.J. Yang. "The implementation of nghe-viet-nam-lac-hau-2-3-the-he-voi-the-gioi-3283451/, technical practices and human factors of the toyota pro- Aug. 26, 2015 [Dec. 12, 2020]. duction system in different industries”. Human Factors [41] Vietnam Chamber of Commerce and Industry – VCCI. and Ergonomics in Manufacturing & Service Industries, vol. “Trình độ công nghệ doanh nghiệp Việt lạc hậu, gần 60% 22, pp. 541-555, 2012. vẫn sử dụng giải pháp tuổi đời trên 6 năm”. Internet: rd [22] D. Pascal. Lean Production Simplified – 2 edition. New www.viettimes.vn/. Aug.30, 2018 [Dec. 12, 2020]. York: Productivity Press Inc, 2007. [42] N.D. Hai, B.T. Nga. "Working Capacity of Managers in Small [23] F. Fiona, D. Santiago. "Critical Success Factors for ERP Im- and Medium Enterprises: A Case Study in Bac Ninh Prov- plementation and Upgrade”. Journal of Computer Infor- ince of Vietnam," South Asian Research Journal of Business mation Systems (Special Issue), vol. 46, pp. 99-113, 2006. and Management, vol. 1, pp. 34-40, 2019. [24] I. Alhuraish, C. Robledo, A. Kobi. "Key success factors of [43] A. Pearce, D. Pons. "Implementing lean practices: manag- th implementing lean manufacturing and Six Sigma”. 17 ing the transformation risks”. Journal of industrial engi- Toulon-Verona Conference: Excellence in Services", 2014, neering, vol. 1, pp. 1-19, 2013. pp. 1-15. [44] General Statistics Office of Vietnam. “Thông báo tình hình [25] J.K. Liker. The toyota way: 14 Management Principles from lao động việc làm năm 2020”. Internet: www.gso.gov.vn, the World's Greatest Manufacturer. Mc Graw Hill, 2004. [Dec. 13, 2020]. [26] J. Shook, Lean Transformation Model. Lean Enterprise In- [45] T. Do, M. Quilty, A. Milner, S. Longstaff, Business culture stitute, 2016. issues in Vietnam: Case studies. The Australian National [27] M. Kumar, J. Antony, A. Douglas. "Does size matter for Six University, pp. 1-49, 2007. Sigma implementation? Findings from the survey in UK SMEs”. The TQM Journal, vol. 21, pp. 623-635, 2009. 108 Management Systems in Production Engineering 2022, Volume 30, Issue 2 [46] D.T. Liễu, N. T. V. Hà. "Hội nhập và văn hóa kinh doanh Việt Nam”. Hội thảo Quốc tế Việt Nam học lần thứ 3 do Viện Khoa học xã hội Việt Nam và Đại học Quốc gia Hà Nội, Ha- noi, 2008, pp. 1-12. [47] P.N.M. Linh, N.T.T. Huong. "The Supply Chain and Logistics of Vietnam in the context of international economic inte- gration”. International Business Research, vol. 13, pp. 27- 44, 2020. Dat-Minh Nguyen (Corresponding author) Electric Power University Faculty of Industrial and Energy Management No. 235 Hoang Quoc Viet Street, Bac Tu Liem 10000 Hanoi, Vietnam e-mail: minhndm@epu.edu.vn Trung-Kien Duong Electric Power University Faculty of Industrial and Energy Management No. 235 Hoang Quoc Viet Street, Bac Tu Liem 10000 Hanoi, Vietnam e-mail: kiendt@epu.edu.vn

Journal

Management Systems in Production Engineeringde Gruyter

Published: Jun 1, 2022

Keywords: Lean manufacturing; Challenge features; Success factors; Vietnam Manufacturing enterprises

There are no references for this article.